Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

I don’t mean to sound overly jaded but I’ve come to believe that investors pay up for funds that benefit from “inside information”. Deep down how many of us think that one can constantly outperform an index based on hard work and research. It’s a competitive market and long term the best most of us can hope for are index type returns.

imagine the money outflow from Wall St. if the Feds parade The Big Guy in handcuffs….
What if they line up 20 of them? That would basically prove that everyone is “doing it”, that securities fraud is the one and only game on Wall St. The “retail investor” will never trust Wall St again.

So, for the sake of the market, for the sake of 401(k) plans, for the sake of successful asset pump by QE2 – let’s not indict anyone, let’s not leak anything to the press – let’s “extend and pretend” this affair… indefinitely… like we did with the zombie mega-banks. All for the sake of hard working people’s 401(k) plans of course….

P.S. Has anyone heard if a certain “charitable fund” run by some “J. Cramer” is under investigation too?

No, no, no….what is the FBI thinking? They can’t go after these guys. It will only lead to the tax payer footing the bill for yet another historical bailout as soon as the TOP hedge funds claim too big to fail. LOL. And who are we going to look up to when we find out that all of our HEROES have actually been making money through a rigged system and not from their BOLD aggressive intellects. Besides that…this could lead to a severe depression in luxury item purchases and services. Can you imagine what the rich will be like when they have to forgo their private jet jaunts to Aspen and the like? Heck, congress will have to pass a special bill exempting them from TSA grope sessions or they might “move overseas”. ROFLMAO. Cats and dogs living together….mass hysteria!!!

Re B_Thunders comment. I just saw a segment on CNBC where concern was raised about small investors avoiding the market because they think its rigged. I suspect that the view of the market could not get much worse if it tried to do so. It happens every time after a big crash, it took into the mid 1950s for the small non-rich investor to get back into the market. Things like the flash crash make it hard to make things any worse.

If you haven’t already put in open orders for puts on the firms implicated, you are missing The Big Picture.

If the FBI is raiding offices, that means they have warrants. That means they talked to a judge and were particular about what they are looking for. The overarching story was already in the WSJ. As cynical as I’ve been about the SEC, I do not think the FBI and the DOJ are messing around and they definitely don’t give two craps about pissing off anyone on Wall Street. Any Federal Prosecutor that takes down multiple hedge funds in an insider trading ring and a few fat cats on Wall Street, let alone a whole firm, pretty much cements their next gig as a US Senator or Governor and at the very least as a partner to a defense firm, making bank.

These cases take time to build. Remember the “I” in FBI stands for “Investigations” so clearly someone is building a Federal Criminal Case and I doubt they are pointing the gun at some low level hedge fund stooges.

“Any Federal Prosecutor that takes down multiple hedge funds in an insider trading ring and a few fat cats on Wall Street, let alone a whole firm, pretty much cements their next gig as a US Senator or Governor…”

Get elected Senator and in come the insider tips. It’s more like ancient Rome than anything else.

@mbelardes: Much as I hope you are right (and even more, hope that the trail leads to some of the TBTFs who’ve routinely been having those “eyepopping” 0,1, and 2-trading-loss-day quarters), I’ll believe it when some big names actually start doing time.

Based on on the current state of affairs, i.e. “biggest financial crisis and underlying fraud in history, and 0 convictions of major actors to date” (Madoff doesn’t count … that simply came to light as a result of the increased scrutiny that followed the bust), I ain’t holding my breath.

Again, I hope to be proven wrong in my abiding cynicism on this matter.

There was an article on Cohen in Vanity Fair a while back. It mentioned the Galleon connection. Also, that some of his people had been very inquisitive around town about um background information on publicly traded equities. Cohen was upfront the he knew there were some rumors.

OTOH, he had a terrific track record from the beginning, and the interview showed him phenomenally concentrated on his screens. He now has a huge organization, so some underlings could be getting insider info without his knowing about it.

Have observed these “research network” firms up close and personal. Know them well.

Actually, I can readily see the value in paying a pro $700/hr to pontificate on the details about why a certain product could be very important in category “X”, etc.

But the potential for abuse is obviously there and can readily see how this otherwise “valuable service” could be re-jiggered into a pay-to-play game with inside info being traded for lucre. It’s completely unregulated, barely managed, and an open invitation for you-know-what.

Man, that’s the strangest consistent login method yet. Click login, go to page where firefox has remembered the pass but not the id, double click the id box and the id flashes but doesn’t appear! It looks like nothing has happened but says I’m logged in. Click back button but not yet – refresh – and now I’m logged in.

Anyway, I sure hope the SEC is going to use ‘death by 1000 cuts’ rather than ‘if you cut off the head of the snake, etc.’ logic here.

There just possibly might be a reason why SAC has the distinction of being notious for frequently paying the highest commissions on the street, during an epoch when when explicit commissions have generally tended towards zero – even negative if one is supplying liquidity. So when is a commission not a commission? When is a commission a profit share for first call on material non-public information? Hmmmm, worth pondering. Advice to SEC: Follow the money, and ye always will be rewarded. It is also perhaps worth exploring the question (again) whether brokers with potential information have exploited the profit-sharing route as a conduit for extracting higher rents on time-sensitive or market-moving information that their compliance officers, outside counsel, and common sense deems too risky to exploit in house, but which has immense value. Caveat: One would have thought that anyone operating as such would have had the foresight to NOT directly link outsized commissions to advantaged trades. Yet, greed often blinds. Advice to SAC: ummm errrrr …. pray hard!

Smarter monkeys are getting faster information since before words and the European industrialists time. Rather than deal with this black letter fraud by the bank monopoly, they will try proving if spooning always leads to sex at the field hands in higher cotton. Misdirection at its finest..or how we got here?

I want to believe this is real, but I just can’t help wondering if this is a bit of theater to deflect public hatred from the banks/government cabal. I’m thinking of the Lily Tomlin quote in the previous post: “No matter how cynical you get, it’s impossible to keep up.”

Oh please. Don’t any of you remember Boesky? Friedman (Freedman?), and a host of other “big dogs” paraded out if cuffs by then Prosecutor Rudy? This is mere theater as far as the market is concerned. If the market goes down from here, it has nothing to do with this.

“…SUMMARY: EPA will authorize its contractor, Industrial Economics,
Incorporated (IEc) to access Confidential Business Information (CBI)
which has been submitted to EPA under the authority of all sections of
the Resource Conservation and Recovery Act (RCRA) of 1976, as amended.
EPA has issued regulations that outline business confidentiality
provisions for the Agency and require all EPA Offices that receive
information designated by the submitter as CBI to abide by these
provisions…”

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About Barry Ritholtz

Ritholtz has been observing capital markets with a critical eye for 20 years. With a background in math & sciences and a law school degree, he is not your typical Wall St. persona. He left Law for Finance, working as a trader, researcher and strategist before graduating to asset managementRead More...

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